Revisiting the Environmental Kuznets Curve Hypothesis in Pakistan

Revisiting the Environmental Kuznets Curve Hypothesis in Pakistan

Authors

  • Muhammad Zaheer Khan BUITEMS

DOI:

https://doi.org/10.51153/mf.v16i1.446

Keywords:

Foreign direct investment, trade openness, environmental degradation, economic growth

Abstract

A number of studies have already determined the existence of inverted U-shaped environmental Kuznets curve in Pakistan however the role of structural breaks in determining the relationship is yet to be investigated. The objective of this study was to determine if the presence of possible structural breaks explain the existence of environmental Kuznets curve type relationship in Pakistan for the period 1980-2016 by using data of total energy consumption, Real GDP per capita, foreign direct investment and trade openness. For the analysis the study first used the conventional time series econometric methods to determine the order of integration and Cointegration in the model. Second; as it is evident from the literature that presence of structural break in the model can have a significant impact, so the study used the Zivot and Andrews unit root test with one structural break to determine the order of integration in the model and Gregory-Hansen -Cointegration method to determine the presence of structural break within Cointegration framework. The results of the study not only confirm the existence of environmental Kuznets curve in the model, it also confirms the presence of structural break in the model.

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Published

2021-06-01

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Vol. 16 No. 1 (2021): Market Forces Research Journal Volume 16 Issue 1

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